Listed clothing retailer, Edgars Stores Limited’s turnover in the 13 weeks to April 11, 2021, was 17% below the prior comparative period owing to the ravages of Covid-19, Business Times can report.
The pandemic forced Edgars to close its physical stores for seven weeks during the reviewed period. The group resorted to online stores, but this brought “very little business”.
Exacerbating the situation was the suppressed consumer spending patterns triggered by depressed salaries being paid to potential customers.
This contributed immensely to the downturn as people were spending about 79% of their disposable income on food, leaving very little to spend on other needs like clothing, according to Edgars CEO, Tjeludo Ndlovu.
Units sold declined to 417 639 from 542 082 reported in the prior comparative period, resulting in the inflation-adjusted EBITDA dropping by 17% compared to the same period last year.
The group’s borrowings were ZWL$364m from ZWL$245m in December 2020. The Group did not have any material foreign denominated debt at the end of the quarter.
Units sold at Edgars chain dropped 36% to 132 120 while Jet Chain’s unit sales also declined by 42% to 188 249 units during the reviewed period. Carousel Manufacturing, however, had a strong performance as they were open throughout the lockdown period after they were deemed an essential service.
Its sales were 297% up to 42 757 compared to last year.
Active accounts as expected declined to 37.6% from 41% of the total number of accounts recorded in December.
The group, however, expects new customers as the trading environment is slowly improving.
Ndlovu said debtors carried the group during the period under review.
Debt collection, Ndlovu said, improved to about 39.8% of the total book compared to 36.1% in December 2020 and 34.7% in September 2020.
“Normal trading resumed on March 3, 2021 bringing relief to our turnover and more importantly to our cash flows. The debtors’ book collections kept the company going during lockdown as most of our credit customers paid their instalments on time,” Ndlovu said.
“Lessons drawn from the first lockdown assisted the company in improving online payment platforms for our customers, hence a significant increase in collections during the second lockdown compared to 2020 lockdown. The company was able to honour its pressing obligations on time.”
She said management will continue to monitor costs, cashflows and volumes in this rapidly changing trading environment.